Analyzing International Relations and American Politics

Trump and Sanders: The End of Neoliberalism?

It seems like Sam and I have been beating a dead horse lately with a plethora of pieces on Donald Trump and Bernie Sanders. But cut us some slack, it’s an election year. Plus, we really just don’t like either candidate from a policy perspective, which gives us a lot of fodder to write about, especially when we run out of other ideas for this young blog.

Anyways, I think the question asked in the title of this article is an important one to consider. Trump and Sanders, though different in many respects, aren’t actually that far off from one another. Both are populist candidates attempting to appeal to their respective voter bases by inciting anger with the system. It just so happens that both of them see free trade and globalization as a mutual enemy.

From Trump’s perspective, free trade gives other nations opportunities to rip us off and outcompete us, undercutting American companies and exporting jobs overseas to places that offer lower-wage labor. From Sanders’ perspective, globalization is a means through which corporations can increase their profit margins at the expense of the American worker; why pay more money for low-skilled labor at home when China and Mexico offer just as much low-skilled labor at much cheaper prices? For some reason, both strands of populism with their respective critiques of neoliberal policies have become rather attractive to portions of the electorate during this election cycle.

So what gives? Just 22 years ago, NAFTA went into effect with bipartisan support. Sure, the agreement had its opposition, but both parties still managed to come together to remove trade barriers and promote the free flow of goods between the three major North American nations. Now, a Republican-controlled Congress is struggling to pass the TPP despite the party’s traditional stance in favor of free trade.

Could we be seeing a shift in public sentiments regarding free trade? It’s entirely possible considering the rise of populism in recent American politics. Low-skilled workers are worried now more than ever about their job security with China’s economic dynamism presenting a challenge to America’s economic competitiveness. Poorer Americans are worried about falling wages and are struggling to provide for their families while income inequality widens and the richest 1% only get richer. Globalization and neoliberal policies make for an easy scapegoat despite the fact that both have provided enormous benefits and increased standards of living through specialization.

As the United States faces continued challenges to its economic competitiveness and status as the world’s sole superpower going forward, it’s likely we’ll see more protectionist rhetoric from economic nationalists like Donald Trump, especially as more low-skilled workers get replaced. Likewise, as income inequality gets worse and more American corporations go elsewhere for cheap labor, the left will continue to hold firm on its anti-globalization stances. Even in the best of circumstances, neither side will ever fully disappear from politics.

But the genie is already out of the bottle; technological advances and interconnectedness ensure that globalization is inevitable regardless of what the U.S. chooses to do from a policy perspective. We can either concede to the anti-neoliberal populists and hurt ourselves in the long-run, or we can embrace globalization by removing trade barriers and specializing in areas where we possess a comparative advantage in order to take full advantage of what the world economy has to offer.